IndyMac Bancorp Inc. is facing a class-action lawsuit that accuses the company of issuing misleading information in order to inflate its stock price.
The lawsuit was filed on June 11 on behalf of the shareholders of IndyMac from August 16, 2007 to May 12, 2008. During that time, the stock price of the Pasadena-based firm traded as high as $34.55 a share. The suit mentions Chief Executive Michael Perry and Chief Financial Officer A. Scott Keys in the complaint.
The suit alleges that IndyMac issued “materially false and misleading statements regarding the company's business and financial results.” The complaint specified that the company downplayed its “growing exposure to non-performing assets, particularly loans in its pay-option adjustable-rate mortgage and homebuilder construction portfolios.”
“We have reviewed the lawsuit and feel it is without merit and we will vigorously defend ourselves,” IndyMac spokesman Evan Wagner said last Friday.
On the company’s corporate website, Grove Nichols, IndyMac's Communications Director, said that the suit is “bogus” and that missing “a good faith forecast which contains appropriate disclosures of risk factors does not constitute a securities law violation.”
"The fact of the matter is that the current market has been a disaster for everyone in our industry, and IndyMac's shareholders have suffered along with the shareholders of many other financial institutions," Nichols said in his blog entry.